Last night I picked up Kyla and George from their after-school program. Kyla got into the car and announced that they were having a mock election at school tomorrow, and that she was going to vote for Mitt Romney, because Barack Obama would raise our taxes!
Like all fundamentalist faiths, Chicago School economics is, for its true believers, a closed loop. The starting premise is that the free market is a perfect scientific system, one in which individuals, acting on their own self-interested desires, create the maximum benefits for all. It follows ineluctably that if something is wrong within a free market economy – high inflation or soaring unemployment – it has to be because the market is not truly free. There must be some interference, some distortion in the system. The Chicago solution is always the same: a stricter and more complete application of the fundamentals.
Several years ago I read Fr. Sergei Bulgakov’s claim that Marxism is not social science but a kind of religion. Recently I realized his argument could also be applied to the laissez-faire capitalism promoted by “market liberalism” (which is basically libertarianism). Beginning with Bulgakov, here are a few reasons why I think market liberalism is a religious movement. Continue reading →
An icon takes something material and makes it transcendent by pointing away from itself. I think the economy should work like an icon. That means the meaning of market activities cannot be found in a market. This is something we forget a lot of times. Part of what it means to be in a market society is that we work ourselves to death and never bother to ask, “Why?” Maybe I am nuts or maybe I am naive, but I don’t think this is what life is supposed to be like.
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. –Adam Smith, Wealth of Nations
To explain how capitalism enables a “sick epectasis,” I need to offer a brief history of the liberal (i.e. “liberated”) market.
Pretty much every economist agrees that capitalism originated with Adam Smith’s Wealth of Nations (a book which most partisans of capitalism have never bothered to read). Smith’s genius was in recognizing that the market is not a zero-sum game in which one person must lose for another to win. Two people, motivated by their self-interest, could both benefit from an exchange. A number of other ideas are connected to this basic insight. Continue reading →